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Business Journal
The Well-Being Revolution
Business Journal

The Well-Being Revolution

by Steve Crabtree

This article is the first in a two-part series.

It's time to change the way the world thinks about encouraging happy, fulfilling, prosperous lives. That's because well-being does more than make people feel good; it promotes the kind of beneficial consequences that can make for stronger, more stable workplaces and societies.

QUOTE: Is it feasible for a government to measure the wellbeing...

So says Ed Diener, who has dedicated much of his career to measuring, studying, and writing about subjective well-being and its implications for organizations and societies. In recent years, Diener, a prominent University of Illinois psychology professor, along with Martin Seligman and other luminary psychologists, has been one of the driving forces behind an increasingly influential branch of psychology devoted to studying human strengths and virtues. In 2004, Diener and Seligman coauthored an article titled "Beyond Money: Toward an Economy of Well-Being," which argued that organizations and nations would benefit from a systematic assessment of well-being and taking steps to improve it.

Kicking off a recent forum on global well-being in Washington, D.C., Diener said, "National well-being accounts will provide a revolution in what policy makers consider." After discussing preliminary findings on the state of well-being around the globe, Diener described his vision of how well-being "accounts" would complement current economic indicators in guiding policy decisions of governments worldwide.

Well-being from Afghanistan to Zimbabwe

But could it really be done? Is it feasible for a government to measure the well-being of its citizens and its effectiveness in promoting well-being in the same way that organizations use management metrics to account for "the human factor" in business outcomes? The answer is yes. The European Union monitors psychological well-being through the Eurobarometer, and the Gallup World Poll continually assesses the well-being of people in more than 130 countries and areas. The systematic worldwide assessment of well-being -- as well as the conditions that seem to promote it -- is not only possible, but is actually being carried out on a continuous basis.

The launch of the Gallup World Poll in 2005 has had another important effect on the study of well-being. As a rich new source of data, it has provided a powerful connecting point for researchers from the traditionally disparate worlds of psychology and economics. Thus, psychologists like Diener and Seligman were joined at October's well-being forum by illustrious economists such as Nobel laureate Daniel Kahneman and Princeton's Angus Deaton in a blending of disciplines dedicated to investigating the psychological underpinnings of economic activity. (See "What Were They Thinking?" in the "See Also" area on this page.)

In hosting such events, Gallup hopes to promote the development of, in CEO Jim Clifton's words, a "colossal vat of knowledge" about behavioral economics. This repository would complement that generated by classical economic theory and would represent a body of insight that could help societies take the next steps toward greater well-being for their citizens.

The research framework used by Gallup's World Poll analysts clearly reflects this goal. It posits a behavioral economics model for societies -- a macroeconomic analogue to the Gallup performance management or microeconomic model that describes the linkages between employee contributions and positive business outcomes.

The heart of this new macroeconomic construct is well-being. Just as great workplaces are likely to produce engaged employees and customers, governments that effectively promote well-being can produce engaged citizens. And just as engaged employees and customers make growth and prosperity possible for companies, engaged citizens do the same for their countries. Addressing fundamental needs like law and order and food and shelter form the early steps on the macroeconomic path, followed by higher order needs like jobs and good health. (See graphic "Gallup Path: Macroeconomics.")

Macroeconomic Path

Exactly what is "well-being"?

If ever there was a concept that sounds "fuzzy," well-being is it. Much of the challenge facing researchers who study well-being has been to come up with specific definitions that meet with broad consensus but that are highly conducive to measurement and tracking.

In developing an assessment of well-being for the World Poll, Gallup's approach was similar to the organization's other forays into measuring the "unmeasurable." It's a process that Clifton refers to as "cracking the code" -- finding the quantitative yardstick that can most accurately and reliably describe well-being around the world.

Input from a broad range of experts was distilled into an initial set of questions, which was then used to gather as much data as possible to begin to narrow the set to the questions that best predict positive outcomes. The question set was retested and refined until researchers were satisfied they had arrived at a tool that was as simple, yet as powerful, as possible.

Already, considerable progress has been made toward developing specific definitions of well-being that lend themselves to measurement and constructive analysis. Gallup's current well-being measure, developed using the first round of World Poll data, combines two dimensions: evaluative and experienced.

  • The evaluative component asks respondents to assess the overall status of their lives using an 11-point scale, then to predict where their lives will be five years in the future.
  • The experienced component includes more specific questions about respondents' emotional state. For example, respondents are asked whether they smiled a lot the previous day and whether they were treated with respect all day.

The two dimensions represent the yin and yang of well-being research. The evaluative half represents traditional, straightforward approaches to gauging life satisfaction, while the experienced component reflects the development of techniques, such as the experience-sampling methodology developed by Mihaly Csikszentmihalyi of Claremont Graduate University, which seeks to provide a more immediate, objective assessment.

Both dimensions are considered important facets of well-being, but they tap into different needs and perceptions. The evaluative results are very strongly related to wealth and living standards; as Diener notes, the average ratings across countries show an extremely high correlation with per-capita GDP (.83). The experiential responses, on the other hand, are more closely related to issues of social support and stability, such as respondents' likelihood to feel that corruption is widespread in their country or to feel that they have family or friends they can count on.

Which populations score highest on well-being based on the initial round of surveys? Denmark, New Zealand, Canada, and Australia are near the top of the list of 130 countries measured -- no surprise, given the high GDP and relatively egalitarian income distribution in these countries. But so does Venezuela, indicating that it is possible for lower income populations to display high levels of optimism. At the bottom of the list are Georgia, Haiti, and Bulgaria, along with a group of East African countries including Ethiopia, Tanzania, Uganda, and Zimbabwe.

But almost everywhere, an essential optimism is reflected in respondents' predictions of where they will be in the future, which are significantly higher than their ratings of where they are in the present. As Jim Harter, Gallup's chief scientist workplace management and well-being, told the forum participants, "People are hopeful nearly anywhere you go in the world."

Identifying the social, material, and psychological factors that most consistently leverage that sense of hopefulness is a goal shared by the growing number of researchers who study well-being. Part 2 of this article will discuss the recent work of several prominent forum participants, including Princeton economists Angus Deaton and Alan Krueger.

Though the event drew analysts and scholars from all over the world and a number of different disciplines, one sentiment was unfailingly conveyed by all of them: Research is just getting started, but well-being is a vein of study with the potential to improve the lives of billions. Clearly, that is something to feel happy about.

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